Wednesday, June 22, 2005

BellSouth Seeks City-Parish Subsidy

Wednesday's edition of The Daily Advertiser carries a story on what is called "an offer" by BellSouth to City-Parish President Joey Durel in an attempt to derail plans for LUS to run fiber to every home and business in the city.

This isn't an offer; it's a plea for Lafayette to prop up BellSouth in its competition with Cox across South Louisiana!

Apparently still unable to convince his Atlanta bosses that Lafayette is a dynamic and important market for the company (due to Cox winning a good bit of phone market share here?), BellSouth Louisiana President Bill Oliver is asking City-Parish Government to subsidize the company's business here!

The subsidy (which I've heard could be as high as $2.5 million per year!) would be used to bring a what would currently be considered a "good enough" network to as much as 80 percent of the city. The other 20 percent of the city (Hmmm! wonder where that might be?) would be stuck with whatever they've got now.

Would there be legal issues arising from a direct government subsidy that supports corporate red-lining?

One of the fundamental problems with this offer — beyond the subsidy/corporate welfare piece — is that the proposed network would be obsolete just about the time it was completed.

The underlying assumption in the plan is that 24 megabit per second download speeds will be adequate in 2009-2010. That might be true if nothing changed between now and then, but there is the little matter of HD-TV convergence in the offing that will render the proposed network obsolete as soon as it happens.

That convergence is being pushed along by demand for wireless spectrum. A good bit of spectrum is now tied up by television broadcasters who have their long-held analog spectrum (the stations you can pick up with a regular television antennae) and the free digital spectrum Congress gave them about a decade ago to open the way for the development of HD-TV. There is mounting pressure in Congress to make the broadcasters give back the analog spectrum, which was part of the deal that got them the free digital spectrum.

The relevance is this: HD-TV signals take up more bandwidth than analog channels (that's why cable providers are working with broadcasters to put off that give-back date). The network described in the BellSouth offer/plea will not be adequate to deliver HD-TV to all subscribers on that network. The result will be either bandwidth rationing or price ratcheting.

So, the 'in Lafayette' impact of the subsidy would be to saddle tax payers with a new entitlement program that would produce a network with limited utility, while providing businesses and consumers no protection on rates. Right! BellSouth wants tax payers to fund a networbuild-outut (which would have the effect of endorsing it's anti-competitive practices) but be allowed to charge whatever it wants for the services that network enables them to deliver.

It also appears that BellSouth wants Consolidated Government and taxpayers to help them pay for new fiber capacity between New Orleans and Lafayette. Again, Oliver wants Lafayette to do for him what he can't convince his bosses in Atlanta to do. New fiber capacity between here and New Orleans would help BellSouth in all markets in between.

BellSouth offers no ideas as to how Consolidated Government is supposed to pay for this subsidy, particularly since the intent of this dog and pony show is to defeat the LUS Fiber Referendum on July 16. Maybe cut night bus service? Police and fire pay? Government layoffs?

This is an essential point. This is not a serious offer because it offers no specifics. It's sole purpose was to enable Oliver, his minions and The Sock Puppets to be able to claim that "an offer has been made."

The technology included in this plan pales in comparison to that contained in the LUS Fiber plan. But, it is on the financials that it falls apart.

Under this plan, millions more in Lafayette dollars would be removed from circulation here and shipped off to other BellSouth operations through the subsidies alone. Control of rates is mentioned nowhere.

This is a sweetheart deal for BellSouth. After trying to kill the LUS plan in the Legislature last year before it got to the feasibility stage; after funding push polls seeking distort public understanding of the fiber issue not once, but twice; after suing to force an election; after fighting the project at the bond commission; after liberal use of deliberately misleading terms like "functional equivalent" and "fiber to the curb"; after calling the global recognition of fiber as superior infrastructure "a fetish," Oliver came calling on Durel calling this plea an offer!

It delivers nothing in the way of innovation to Lafayette. It would consign 20 percent of the citizens of this community to a technology backwater and instead of closing the digital divide would make it the official policy of City-Parish Government.

This is not an offer; it is not a plan; it is a ploy of a desperate company losing market share, and confronted with the reality that it is on the verge of losing its place in what is emerging as the most demanding market in the state.

Bill Oliver's problem is not in Lafayette, it's in Atlanta. BellSouth HQ in Atlanta does not recognize or in any way honor the aspirations of this community.

We want to do better! We don't want to be one of 100 cities of 100,000 people that are muddling along in a pack while other, larger cities pull away from us based on technological advantage. We want to create the kind of community here where success is not determined by where you live, or how much money your daddy had, but how big your dreams are and how well you take advantage of the great tools here that will enable you to realize them.

The LUS Fiber Project has already succeeded in surpressing cost increases from Cox. It has vaulted Lafayette into the consciousness of Fortune 500 companies. It has companies looking at Lafayette as a site to pilot new technology. Will some reporter ask Joey Durel to talk about his meetings with Sun Microsystems? These were face-to-face meetings between Durel and Scott McNealy and other leaders of Sun. It is a direct result of the LUS Fiber Project being on the table.

It's working and it hasn't event been built yet! The BellSouth ploy starkly outlines the choice for Lafayette on July 16. We can invest in our community, ourselves and our future and Vote Yes! Or, we can be content to be like a bunch of other indistinct, mid-size cities that are cash cows for companies that make their more important investments elsewhere.

It's a stark choice, but a clear one! I'm Voting Yes For Fiber on July 16. Don't let Bill Oliver fool you.

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